Banking Sector Tightens Prudential Measures Amid Geopolitical Risks

Jakarta, CNBC Indonesia - The national banking industry is strengthening its risk management framework and prudential banking principles amid rising global risks, triggered by the escalation of the Iran-Israel conflict involving the United States, which has the potential to pressure the stability of strategic commodity prices, particularly crude oil. Perbanas Chairman, who is also the President Director of PT Bank Rakyat Indonesia (Persero) Tbk (BBRI), Hery Gunardi, emphasised that although external volatility is increasing, the fundamental indicators of the domestic banking sector remain at solid levels. This is reflected in the maintained credit growth, adequate liquidity, and strong capitalisation. “We see global risks increasing, particularly through the transmission of rising energy prices and financial market volatility. In this context, the banking sector will further strengthen prudential principles through enhanced risk management and asset quality,” Hery stated in an official remark on Friday (27/3/2026). Perbanas notes that several mitigation measures have been and continue to be strengthened by the banking industry in Indonesia. Some of these measures include sectoral stress tests and strengthening the early warning system to anticipate potential declines in credit quality. The sectoral stress tests are conducted on sectors sensitive to rising energy costs, such as transportation, logistics, and manufacturing. In addition, Hery continued, the banking sector is also increasing credit disbursement discipline through a risk-based pricing approach, maintaining liquidity adequacy through optimisation of the liquidity coverage ratio (LCR) and net stable funding ratio (NFSR), and managing foreign exchange exposure more conservatively through hedging strategies and control of net foreign exchange positions. “These measures are important to ensure that the intermediation function continues to operate optimally without neglecting stability aspects, especially amid high global uncertainty,” he added. With this policy mix, the banking industry is expected to remain resilient and capable of supporting domestic economic growth, even though external pressures may increase in the short to medium term.